Is a lawsuit brewing with Kikkoman?
Villages of Walworth, Fontana hold closed door meeting
November 03, 2010 | 08:43 AM
Fontana — The soy sauce manufacturer and the two municipalities work together at the Fontana Walworth Water Pollution Control Commission, but that relationship soon may be in turmoil.
The Walworth and Fontana village boards met behind closed doors Monday night to discuss possible litigation with Kikkoman Foods.
It appears Kikkoman is planning to back out of a billing agreement, which could end up increasing sewer rates for village residents.
In 2007, Kikkoman Foods signed a contract that requires a monthly minimum payment.
The minimum payment is determined by a formula that includes the plant's monthly usage. Its last quarterly bill was more than $85,000.
Commission attorney Larry Steen said he was contacted by a Kikkoman attorney who told him the company will stop making the minimum payment in January 2011.
"My view is that Kikkoman is violating the minimum billing agreement that is to remain in effect until both Kikkoman and the commission agree to abandon it," Steen said Tuesday afternoon.
No documents have been filed in Walworth County Circuit Court regarding Kikkoman and the villages.
Steen said a notice of claim also hasn't been filed, but "there is still a possibility of litigation" if the villages of Walworth and Fontana decide to pursue it.
"If it was one of the villages that violate the agreement, I would equally voice the same concerns," he said.
Plant Superintendent Dean Donner said the treatment plant relies on funding from all three entities to maintain its budget.
"We have reasonable rates compared to other communities," Donner said.
Donner said if the manufacturer discontinued that minimum payment the cost could fall on consumers. Steen agreed.
"The shortfall is going to fall on people who own residences and property in the two villages," Steen said.
concerns in 2009
According to the commission's Oct. 13, 2009 meeting minutes, Kikkoman representative Jon Raymond asked for the minimum billing to be discontinued.
Raymond told the commission with the minimum payment agreement Kikkoman spends 60 percent more than both villages for its treatment.
Kikkoman began pretreating its waste after the amounts of biochemical oxygen and total suspended solids increased.
The pretreatment was so effective that the commission began losing revenue because Kikkoman was sending less waste to the treatment plant.
To install a $2.3 million equalization tank, Kikkoman agreed to the monthly minimum payment agreement.
But in November 2009, Raymond asked to end the minimum payment requirement.
During that meeting, Fontana Village President Arvid "Pete" Petersen said the only conversation he would be willing to have regarding the minimum billing is raising it, according to the minutes.
In November 2009, the commission tabled discussion of the minimum billing until the plant expansion is complete, which is slated for December.
The agreement states the minimum billing could be renegotiated if the "wastewater treatment plant is required to be physically expanded/improved." However, both Kikkoman and the commission would need to agree to the change.
Bad bacteria in the waters
In the past year, filamentous bacteria have been discovered in the treatment facility, which isn't present during normal conditions. Typically, filamentous organisms are found in manufacturing plants that brew beer. Soy sauce also is brewed in a similar way.
The treatment plant received a violation from the DNR because of the presence of bacteria.
Since that time, Kikkoman has worked on reducing the amount of filamentous bacteria that enters the plant.
However, according to the preliminary minutes for the commission's 2009 minutes, problems still exist with the bacteria.
According to those minutes, the commission has spent more than $700 for beneficial bacteria to combat the filamentous bacteria.